Recently, the Energy Information Administration (EIA), the International Energy Agency (IEA) and BP updated their outlooks for U.S. oil production.
All of these projections have one thing in common: Over the next few years, U.S. production growth is going to far outstrip OPEC’s production growth. As a result, the U.S. will gain market share at OPEC’s expense.
This scenario would continue a trend that started a decade ago when the U.S.’s production gains began to outstrip those of OPEC, as well as every other oil-producing country in the world.
EIA Forecast
The EIA’s latest Annual Energy Outlook (with projections to 2050) models several scenarios for future oil production. (It was also the topic of a recent article). The EIA’s base case assumes that known technologies continue to improve along recent trend lines. Additional cases consider either lower costs and higher resources, or higher costs and lower resources than the base case.
In even the most pessimistic case, tight oil grows by another million barrels per day (BPD) from 2017 levels by about 2022. The base case projects growth of approximately three million BPD over the next five years. The optimistic scenario projects sharply higher tight oil growth of nearly nine million BPD by 2050.
BP Forecast
BP made its projections in its recently released 2018 Energy Outlook, predicting that the U.S. will become “by far the largest producer of liquid fuels.”
BP’s base case scenario assumes much the same conditions as the EIA’s base case. BP’s base case “assumes that government policies, technology and social preferences continue to evolve in a manner and speed seen over the recent past.”
Under this scenario, BP projects that U.S. tight oil production grows by around five million BPD, peaking at close to ten million BPD in the early 2030’s. BP projects in this scenario that U.S. oil producers will take market share from both OPEC and from Russia.
